Grey Hydrogen Market Valuation To Hit US$ 1,222.69 Billion By 2050 | Astute Analytica

(MENAFN- GlobeNewsWire - Nasdaq) Grey hydrogen set to witness significant growth in production and consumption in years to come. government efforts and private findings to add fuel to this growth as stakeholders are slowly exploring sustainable alternatives to traditional fuels and feedstock.

New Delhi, Jan. 28, 2025 (GLOBE NEWSWIRE) -- The global grey hydrogen market was valued at US$ 188.72 billion in 2024 and is estimated to reach US$ 1,222.69 billion by 2050, growing at a CAGR of 7.45% during the forecast period 2025–2050.

Global grey hydrogen accounts for the bulk of hydrogen supplies worldwide, largely due to its reliance on steam methane reforming (SMR). In 2022, global hydrogen production exceeded 95 million tons overall, with over 99% derived from non-renewable sources such as grey hydrogen. Around 95% of global hydrogen production comes from SMR in the grey hydrogen market, underscoring the sector's dependency on natural gas as a primary feedstock. Despite its efficiency and lower cost relative to electrolytic hydrogen, grey hydrogen production has a significant environmental impact. It is responsible for roughly 350 million tons of CO2 emissions each year. In fact, analysis suggests that producing one kilogram of grey hydrogen can emit approximately 11 kilograms of CO2, indicating a substantial carbon footprint. These emissions contribute to a broader total of about 830 million tons of CO2 per year linked to overall hydrogen production activities.

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Grey hydrogen market's prevalence can be traced to the energy industry's familiarity with natural gas infrastructure, which simplifies scaling for large industrial applications. By 2019, worldwide hydrogen output had reached approximately 75 million tons, with SMR-based production comprising a remarkable 95% share. This entrenched approach highlights how existing pipelines, processing units, and storage facilities support conventional hydrogen manufacturing processes. However, the environmental toll has become increasingly evident. Rising concerns about climate change, alongside stricter emissions regulations, underscore the need for advancements in carbon management. Grey hydrogen's outsize emissions profile is propelling research into mitigation strategies, such as improved process efficiency and carbon capture and storage (CCS). Even so, many stakeholders believe additional measures are needed to align hydrogen production with global decarbonization goals and emerging climate-focused policies.

Key Findings in Grey Hydrogen Market

Market Forecast (2050)	US$ 1,222.69 billion
CAGR	7.45%
Largest Region (2024)	Asia Pacific (45%)
By Method	Steam Methane Reforming (SMR) (68%)
By Application	Ammonia Production (30%)
By End Use Industry	Chemical Industry (50%)
By Source	Natural Gas (75%)
Top Drivers	Increased reliance on transitional fuels for immediate industrial decarbonization strategies Government incentives supporting grey hydrogen utilization in manufacturing and refining Adaptable infrastructure enabling widespread adoption of steam methane reforming technology
Top Trends	On-site production facilities minimizing transportation challenges and boosting operational reliability Integration of partial carbon capture modules in grey hydrogen plants Collaborative research initiatives accelerating advanced reforming techniques for cleaner processing
Top Challenges	Persistent infrastructural constraints limiting long-distance distribution capabilities of grey hydrogen Complex handling parameters raising safety concerns in hydrogen storage operations Limited stakeholder collaboration hindering policy harmonization and technology transfer initiatives

Consumption Patterns

Grey hydrogen consumption has evolved rapidly, reflecting its broad applications in refining, ammonia synthesis, and other industrial processes. In 2023, global hydrogen demand stood at an estimated 87 million metric tons (MT). Grey hydrogen market covered around 94% of this demand, indicating how profoundly the industrial sector depends on a technology that is both mature and cost-competitive. As emerging economies drive manufacturing growth, rising energy demands create additional incentive for large-scale hydrogen use. China, as the world's largest hydrogen consumer, commands about 24 million tons of annual use. This substantial share indicates the importance of Asian industrial production to the grey hydrogen value chain. Despite growing discussions around shifting to low-carbon alternatives, grey hydrogen continues to be the leading choice in markets where cost and ready availability overshadow sustainability concerns.

Looking further ahead, hydrogen demand is projected to soar to between 500-680 million MT by 2050. A large portion of this surge will come from energy-intensive industries seeking cleaner processes compared to pure fossil fuels, as well as from policymakers advocating hydrogen as part of a broader decarbonization agenda. Yet, grey hydrogen market will encounter increased scrutiny due to the steep emissions curve. Companies and governments alike are weighing how to meet their hydrogen requirements without exacerbating climate challenges. Although grey hydrogen remains entrenched in chemical and refining industries, the possibility exists that a portion of this future demand could be met by low-carbon alternatives, contingent upon the pace of technological advancement and policy frameworks. Nevertheless, in the near and mid-term, cost advantages and robust infrastructure will likely preserve grey hydrogen's stronghold in global consumption.

Major Projects, Consumers, and Economic Aspects of Grey Hydrogen Market

Several major industries exemplify grey hydrogen's widespread use. The chemical sector, and specifically ammonia production, relies heavily on hydrogen for synthesizing feedstock essential in fertilizers and other chemical processes. In parallel, oil refineries integrate large volumes of hydrogen in hydrocracking, desulfurization, and other refining steps. The metal production industry also uses hydrogen as a reducing agent, underscoring the compound's versatility in high-temperature, large-scale operations. Initiatives aiming to curb the carbon intensity of grey hydrogen include projects such as Air Products' Edmonton Net-Zero Hydrogen Energy Complex in Canada, which prioritizes emission reductions. CF Industries, likewise, is directing resources toward carbon capture and storage (CCS) strategies to reduce emissions associated with grey-hydrogen-derived ammonia. Each of these efforts reflects an emerging theme: the industry recognizes grey hydrogen's environmental constraints and is probing ways to mitigate its carbon footprint.

While these mitigation approaches signify important progress, the economics of grey hydrogen market remain a decisive factor. Currently, production costs range from €1 to €2 per kilogram (approximately $1.09 to $2.17 per kilogram), driven largely by underlying natural gas prices. In 2023, an estimated $3.5 billion was funneled globally into hydrogen supply projects under construction, with a notable portion likely allocated to grey hydrogen facilities. Project developers remain sensitive to volatility in natural gas markets, as fluctuations in feedstock pricing can erode profitability. Even so, grey hydrogen's stable demand has motivated an array of private and public stakeholders to invest in maintaining or upgrading existing plants rather than wholly abandoning them for greener alternatives. As a result, near-term economics favor continued reliance on grey hydrogen, further entrenching its role despite growing environmental considerations.

Investments, Funding, and Regional Insights in Grey Hydrogen Market

Investment in hydrogen technologies, including grey hydrogen, has picked up pace. Venture funding is particularly robust in Europe, where innovative start-ups are working on ways to optimize current production methods and capture byproduct CO2 more effectively. Meanwhile, in the United States, the Inflation Reduction Act (IRA) of 2022 provides tax incentives for cleaner hydrogen projects. While the primary beneficiaries are green and blue hydrogen ventures, grey hydrogen developments also stand to gain indirectly if they adopt emissions-reducing strategies that meet policy benchmarks. Such support highlights how government initiatives can pivot the market, nudging industries toward lower-carbon footprints. Additionally, private sector contributions remain significant, aided by programs like the Department of Energy's demand-side support scheme, which is intended to unlock private capital in parallel with federal incentives.

Start-ups and established players in the grey hydrogen market alike are focusing on making grey hydrogen more efficient and less emissions-intensive. Improved SMR processes, integration of CCS, and targeted R&D projects aim to maintain grey hydrogen's cost advantage while answering sustainability concerns. In terms of regional dominance, Asia-Pacific stands out for its accelerated growth in consumption. Large industrial bases, combined with the expanding electric vehicle market, have heightened hydrogen's importance in this region, reflecting a colossal demand for ammonia and refinery feedstocks. North America and Europe also exhibit robust usage, fueled by refineries, chemical manufacturers, and an evolving mobility sector. While both regions explore alternatives, grey hydrogen remains central to many established processes. Ultimately, as investments flow and policies tighten, grey hydrogen will either adapt through cleaner technology or face competition from greener hydrogen variants now emerging on the global stage.

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Environmental Impact, Comparisons, and Future Outlook of Grey Hydrogen

Environmental considerations loom large over the grey hydrogen sector. Responsible for up to 350 million tons of CO2 emissions annually, grey hydrogen intensifies existing climate challenges and faces intensifying policy scrutiny. The broader hydrogen industry, accountable for about 830 million tons of CO2 each year, increasingly collides with global decarbonization targets. As demand surges to between 500 and 680 million MT by 2050, grey hydrogen producers will be compelled to reconcile their emission-heavy processes with evolving environmental regulations. Comparatively, green hydrogen-though more expensive-offers a path with no direct fossil carbon footprint if powered by renewable electricity. Blue hydrogen, supplemented with carbon capture and storage, provides a middle ground but still depends on methane and robust storage solutions. Turquoise hydrogen, produced through methane pyrolysis, emerges as another lower-emission alternative yet remains in earlier phases of commercialization.

Despite its dominance, grey hydrogen market's long-term trajectory will hinge on how swiftly carbon management solutions can be scaled. Governments are imposing carbon taxes, creating emissions trading schemes, and supporting research grants that encourage the industry to either retrofit existing grey hydrogen plants or shift to less polluting methods. The market's future composition will likely be shaped by cost dynamics, logistical infrastructure, and stakeholder commitments to net-zero goals. While grey hydrogen may continue to anchor current demand in core industries, momentum toward decarbonization could eventually reduce its share. Strategic investments in CCS, policy-driven funding, and technology breakthroughs are already nudging the industry toward a cleaner profile. However, grey hydrogen is poised to remain a significant force in the near term, with its future outlook dependent on the interplay between cost, innovation, and the mounting pressure for climate responsibility.

Global Grey Hydrogen Market Major Players:

• Air Products and Chemicals, Inc.
• Linde plc
• Air Liquide
• Shell plc
• ExxonMobil Corporation
• BP plc
• TotalEnergies SE
• Saudi Aramco
• Mitsubishi Heavy Industries Ltd.
• Chevron Corporation
• Others

Key Market Segmentation:

By Production Method

• Steam Methane Reforming (SMR)
• Partial Oxidation of Hydrocarbons

By Source

• Natural Gas
• Coal

By Application

• Ammonia Production
• Methanol Production
• Refining Processes
• Power Generation
• Others

By End-Use Industry

• Chemical Industry
• Oil & Gas Industry
• Power Generation
• Others

By Region

• North America
• Europe
• Asia Pacific
• Middle East & Africa (MEA)
• South America

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